Meesho shares can fall 28%, warns Nomura after initiating coverage with Reduce call. Here is why
Shares of Meesho dropped up to 5% to Rs 221 after Nomura initiated coverage with a Reduce rating and a Rs 167 target price, citing a 28% downside risk. The brokerage highlighted valuation concerns, rising competition from quick commerce, and margin headwinds despite liking Meesho's asset-light model.
On Friday, Meesho's shares fell by up to 5%, reaching a low of Rs 221 on the BSE after international brokerage firm Nomura initiated coverage with a "Reduce" call and set a target price of Rs 167. This advice suggests a potential 28% decrease from the current price. Meesho operates a two-sided marketplace connecting Indian consumers with small manufacturers, generating revenue through advertising and fulfilment services instead of commissions.
The company serves nearly 90% of India's online shoppers. However, Nomura warns that Meesho may face increased competition from traditional e-commerce platforms and Quick Commerce (QC), especially from Amazon and Flipkart, who are expanding into new product categories and geographic areas. Despite the asset-light business model and AI-led innovations, Nomura believes the current share price leaves little room for execution errors due to rising competition and potential logistics disruptions.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
